Cost of Revenue, Cost of Sales, Cost of Goods Sold (COGS)

Cost of goods sold (COGS for short) is the expense a company incurred in order to manufacture, create, or sell a product. It includes the purchase price of the raw material as well as the expenses of turning it into a product. Cost of goods sold (COGS) is also known as cost of revenue or cost of sales.

One of the reasons some investors are extremely successful is because they know the exact relationship between profits and cost of goods sold.